AGA Partners successfully represented the client's interests in GAFTA arbitration in the dispute with a Swiss trading company.
As the result of 8 months long arbitral proceedings, the tribunal satisfied demands of our client in full, for a total amount of over USD200,000.
The decision is extremely interesting for understanding current trends in international agricultural commodities trade. In particular, it covers a detailed model for calculating compensation of damages resulting from the refusal to execute the contract.
The key complexity of this case lied in proving the tribunal’s approach towards calculating the amount of damages. This had a direct influence on the commercial component and compensation, which fluctuated between USD50,000 and 200,000.
The worst case scenario favours the defendant and could result in a minimum amount awarded to our client. This would happen if the arbitrator calculated the damages according to the general rule – on the day after expiration of the delivery period under the contract.
The defendant also provided alternative calculation models, which were dissatisfactory to our client.
Fortunately, our team was able to persuade the tribunal that an on-going negotiations between the parties, despite the formal expiration of the contract, allow to deviate from the general calculations rule and extend the term, which directly affects the increase of damages.
Eventually, the arbitrator satisfied the maximum possible amount in our client's favour by considering all the special aspects of the case.